A secure blockchain‐based demurrage mechanism for energy trading in smart communities
Omaji Samuel, Nadeem Javaid
Abstract
This paper combines additive homomorphic encryption and consortium blockchain technology to provide privacy and trust. Additionally, a dynamic energy pricing model is formulated based on the demand response ratio (DRR) of the load demand of prosumers to address fixed energy pricing problems. The proposed dynamic pricing model includes demurrage fees, which is a monetary penalty imposed on a prosumer, if it failed to deliver energy within the agreed duration. Furthermore, this paper also designs and analyzes a threat model of the proposed system. Experimental evaluations show the effectiveness of the proposed model with regards to low transaction cost, the minimum execution time for block creation, the privacy of prosumers and dispute resolution of demurrage fees. Moreover, the proposed scheme reduces the average system overhead cost up to 66.67% as compared to 33.43% for an existing scheme. Additionally, the proposed blockchain proof-of-authority consensus average hash power is minimized up to 82.75% as compared to 60.34% for proof-of-stake and 56.89% for proof-of-work consensus mechanisms.